Will not come after small shops, retailers with anti-profiteering law: Hasmukh Adhia

Businesses, especially small and medium businesses, are apprehensive what can come under the purview of anti-profiteering.

ET Online|

Updated: Jun 27, 2017, 05.25 PM IST

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Watch: Revenue Secy. Adhia explains GST fine print, market impact

The government on Tuesday made it clear that small businesses have nothing to fear from the anti-profiteering rules introduced in the GST Act and that the law was enacted only to deal with profiteering by big companies.

Section 171 of the CGST Act (and the corresponding provisions of the state GST Acts) create the obligation on businesses to pass on to the recipients any reduction in the rate of tax or the benefit of input tax credit by way of commensurate reduction in prices. In case a business does not, the authority setup to check anti-profiteering can enforce compliance of the relevant provisions. Businesses, especially small and medium businesses, are apprehensive what can come under the purview of anti-profiteering.

In a conversation with ET Now, Revenue Secretary Hasmukh Adhia said there should be no concern about harassment in the name of anti-profiteering.

"…the concern should not be there with the companies because it is a tool which is meant only for big people in whose case it is quite clearly proven that they have not passed down the benefit of input tax credit or reduction in the tax rate. So it is only in those very few cases of big companies where they need to worry about it. We are not going to use anti profiteering for small shops and retailers as to somebody has not reduced the price of soap because that is taken care of by competition," said Adhia.

Adhia added that the authority set up to check anti-profiteering has enough teeth. "The authority can force somebody to rollback the price increase. The authority can ask a company to in fact reimburse the entire extra price which is charged to the customer and the authority also has a right to recover that entire amount of profiteering and put it in a consumer education fund," said Adhia.

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